Buying a house for college housing

[Anonymous]

I know of a family that bought a TH in a college town. However, in that case all kids were expected to attend that university.

All 5 did, so it ended up working out well for their family. The siblings stayed together and also had housemates, depending upon who was there at the time.

All of them lived in the dorm their first year.

[Anonymous]

Absolutely not. That is an unfair burden to play on kid #2 to go to the same school as kid #1, and unfair to ask kids to live together vs. grow and live with friends.

[Anonymous]

Are you for real, OP?? Let your second kid pick their own college just as you let the first. What is wrong with you??

[Anonymous]

I am hating you OP lol

We can barely even pay for the tuition, kids work part time in colleges to support themselves. Out of jealousy I am just goning to advise you NO, it's not good finanacially, not good for the kids, even if this doesn't present an issue to you financially, I am still going to tell you no because it makes us feel awful lol

[Anonymous]

I would never want to be a landlord to college students.

[Anonymous]

Lots of costs to consider:
(1) opportunity cost of money invested in down payment that could be invested elsewhere
(2) monthly mortgage + utilities
(3) property taxes
(4) maintenance and repair
(5) cost of any months not occupied (summer) or subletting hassles/damages
(6) Selling costs (broker fee, etc)

And finally the (not so subtle) pressure on your younger child to attend that is evident from your post.

[Anonymous]

Yes. We are doing this.

It’s a little more than a college town, small city.

Waiting to see if second one gets in

[Anonymous]

Anonymous wrote:Many families we know are doing this. Some kids would have both the on-campus dorm and off campus house. Provide a lot of flexibility.

Can you tell us more? We are considering it...

[Anonymous]

Way back in the 90’s my boyfriend at the time rented a bedroom in a five room, two story house with guys he met in college. Junior and senior years, after they’d been in the dorms for the first two years. One of the guys parents bought it for this express purpose.

I think the idea was that the kid was staying in this city after college and staying in the house.

[Anonymous]

Anonymous wrote:Lots of costs to consider:
(1) opportunity cost of money invested in down payment that could be invested elsewhere
(2) monthly mortgage + utilities
(3) property taxes
(4) maintenance and repair
(5) cost of any months not occupied (summer) or subletting hassles/damages
(6) Selling costs (broker fee, etc)

And finally the (not so subtle) pressure on your younger child to attend that is evident from your post.

This. Add to this it’s not in your home town and assuming you don’t want your kids to be landlords, you might have to hire someone to manage the property if they’ll have roommates.

I wouldn’t buy real estate expecting to flip in 5 years.

[Anonymous]

Absolutely not, no.

[Anonymous]

We moved in 2006– and got killed— bought at the top of the market, assumed we could sell no problem, it crashed the next month and huge financial loss.

And are under contract to buy and sell now (Bye Elon! You wanted me to find a productive private sector job. Done. Wait? You want me to come back because I’m suddenly critical? Hard pass). I am so thankful our DMV house is under contract, closes in a week 30% down, inspection cleared, because the market is really slowing, houses are sitting and it has a 2006 feel. Great school district, good neighborhood, and I still was concerned enough that we didn’t put an offer on a new house until we had a contract on the old one.

No way I would invest in real estate just because for a short time frame. It took our DMV house 10 years to rebound and resell for exactly what we paid for it. Remember that fun period in real estate?

[Anonymous]

I had a friend whose parents did this for grad school. I don't know what they did with the house after she graduated. It was in a college town.

[Anonymous]

Anonymous wrote:Lots of costs to consider:
(1) opportunity cost of money invested in down payment that could be invested elsewhere
(2) monthly mortgage + utilities
(3) property taxes
(4) maintenance and repair
(5) cost of any months not occupied (summer) or subletting hassles/damages
(6) Selling costs (broker fee, etc)

And finally the (not so subtle) pressure on your younger child to attend that is evident from your post.

This is a good list of costs. But what many posters are missing is that this isn’t a real estate investment. It’s a comparison against the cost of paying dorm fees and required meal plans. If the monthly costs for a place (mortgage + expenses) is significantly less than the costs for a dorm, then you can take a hit on resale and still come out ahead. Also, there could be income from renting a room to another student.

I looked into for my oldest and the reason I decided against it was that most of the housing available was older 1950s home that needed serious maintenance (I wasn’t going to be able to let it be as is.) The one condo building was a possibility (1970s), but there were lots of reports of cockroaches (urban area) and I didn’t want DC bringing insects home.

[Anonymous]

No, that’s way too much micromanaging of your son’s future.